What changed in this filing

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Item 1. Financial Statements

2024-05-30 compared with 2023-11-30 · 182 added, 212 removed, 671 unchanged (37% of the section changed)

3 unchanged sentences

(in millions)

October 31, 2023 January 31, 2023

April 30, 2024 January 31, 2024

Assets (unaudited)

36 unchanged sentences

See accompanying Notes.

T a b l e o f C o n t e n t s

Salesforce, Inc.

1 unchanged sentence

(in millions, except per share data)

3 Three Months Ended October 31, Nine Months Ended October 31,

2023 2022 2023 2022

1 Three Months Ended April 30,

Subscription and support $ 8,585 $ 7,642

8 unchanged sentences

Research and development 1,368 1,207

Marketing and sales 3,173 3,345 9,440 10,141

Sales and marketing 3,239 3,154

General and administrative 647 638

3 unchanged sentences

Gains (losses) on strategic investments, net 37 ( 141 )

Other income (expense) 58 ( 8 ) 158 ( 121 )

Other income 121 55

Income before provision for income taxes 1,867 326

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(1) Amounts include amortization of intangible assets acquired through business combinations, as follows:

Three Months Ended October 31, Nine Months Ended October 31,

2023 2022 2023 2022

Three Months Ended April 30,

Cost of revenues $ 238 $ 248

Marketing and sales 223 224 668 693

Sales and marketing 223 223

(2) Amounts include stock-based compensation expense, as follows:

Three Months Ended October 31, Nine Months Ended October 31,

2023 2022 2023 2022

Three Months Ended April 30,

Cost of revenues $ 119 $ 103

Research and development 260 241

Marketing and sales 275 330 815 947

Sales and marketing 290 263

General and administrative 81 73

1 unchanged sentence

See accompanying Notes.

T a b l e o f C o n t e n t s

Salesforce, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

Condensed Consolidated Statements of Comprehensive Income

(in millions)

3 Three Months Ended October 31, Nine Months Ended October 31,

2023 2022 2023 2022

1 Three Months Ended April 30,

Net income $ 1,533 $ 199

Other comprehensive loss, net of reclassification adjustments:

Foreign currency translation and other losses ( 65 ) ( 66 ) ( 54 ) ( 175 )

Other comprehensive income (loss), net of reclassification adjustments:

Foreign currency translation and other gains (losses) ( 23 ) 6

Unrealized gains (losses) on marketable securities and privately held debt securities ( 30 ) 16

Other comprehensive loss, before tax ( 74 ) ( 143 ) ( 52 ) ( 354 )

Other comprehensive income (loss), before tax ( 53 ) 22

Tax effect 8 ( 3 )

Other comprehensive loss, net ( 73 ) ( 126 ) ( 57 ) ( 315 )

Comprehensive income (loss) $ 1,151 $ 84 $ 2,633 $ ( 9 )

Other comprehensive income (loss), net ( 45 ) 19

Comprehensive income $ 1,488 $ 218

See accompanying Notes.

T a b l e o f C o n t e n t s

Salesforce, Inc.

1 unchanged sentence

(in millions)

Three and Nine Months Ended October 31, 2023

Three Months Ended April 30, 2024

Common Stock Treasury Stock Additional

5 unchanged sentences

Common stock repurchased 0 0 ( 7 ) ( 2,168 ) 0 0 0 ( 2,168 )

Stock-based compensation expense 0 0 0 0 696 0 0 696

Other comprehensive income, net of tax 0 0 0 0 0 19 0 19

Net income 0 0 0 0 0 0 199 199

Balance at April 30, 2023 1,016 1 ( 39 ) ( 6,144 ) 56,026 ( 255 ) 7,784 57,412

Common stock issued 7 0 0 0 595 0 0 595

Common stock repurchased 0 0 ( 9 ) ( 1,913 ) 0 0 0 ( 1,913 )

Stock-based compensation expense 0 0 0 0 724 0 0 724

Other comprehensive loss, net of tax 0 0 0 0 0 ( 3 ) 0 ( 3 )

Net income 0 0 0 0 0 0 1,267 1,267

Balance at July 31, 2023 1,023 1 ( 48 ) ( 8,057 ) 57,345 ( 258 ) 9,051 58,082

Common stock issued 3 0 0 0 111 0 0 111

Common stock repurchased 0 0 ( 9 ) ( 1,947 ) 0 0 0 ( 1,947 )

Stock-based compensation expense 0 0 0 0 693 0 0 693

Stock-based compensation 0 0 0 0 753 0 0 753

Other comprehensive loss, net of tax 0 0 0 0 0 ( 45 ) 0 ( 45 )

Cash dividends declared 0 0 0 0 0 0 ( 388 ) ( 388 )

Net income 0 0 0 0 0 0 1,533 1,533

Balance at October 31, 2023 1,026 $ 1 ( 57 ) $ ( 10,004 ) $ 58,149 $ ( 331 ) $ 10,275 $ 58,090

Three and Nine months ended October 31, 2022

Balance at April 30, 2024 1,042 $ 1 ( 71 ) $ ( 13,860 ) $ 60,946 $ ( 270 ) $ 12,866 $ 59,683

Three Months Ended April 30, 2023

Common Stock Treasury Stock Additional

4 unchanged sentences

Common stock issued 7 0 0 0 283 0 0 283

Stock-based compensation expense 0 0 0 0 776 0 0 776

Other comprehensive loss, net of tax 0 0 0 0 0 ( 144 ) 0 ( 144 )

Net income 0 0 0 0 0 0 28 28

Balance at April 30, 2022 994 1 0 0 51,780 ( 310 ) 7,405 58,876

Common stock issued 5 0 0 0 348 0 0 348

Stock-based compensation expense 0 0 0 0 851 0 0 851

Other comprehensive loss, net of tax 0 0 0 0 0 ( 45 ) 0 ( 45 )

Net income 0 0 0 0 0 0 68 68

Balance at July 31, 2022 999 1 0 0 52,979 ( 355 ) 7,473 60,098

Common stock issued 3 0 0 0 69 0 0 69

Common stock repurchased 0 0 ( 11 ) ( 2,144 ) 0 0 0 ( 2,144 )

Stock-based compensation expense 0 0 0 0 843 0 0 843

Other comprehensive loss, net of tax 0 0 0 0 0 ( 126 ) 0 ( 126 )

Stock-based compensation 0 0 0 0 696 0 0 696

Other comprehensive income, net of tax 0 0 0 0 0 19 0 19

Net income 0 0 0 0 0 0 199 199

Balance at October 31, 2022 1,002 $ 1 ( 11 ) $ ( 1,743 ) $ 53,891 $ ( 481 ) $ 7,683 $ 59,351

Balance at April 30, 2023 1,016 $ 1 ( 39 ) $ ( 6,144 ) $ 56,026 $ ( 255 ) $ 7,784 $ 57,412

See accompanying Notes.

T a b l e o f C o n t e n t s

Salesforce, Inc.

1 unchanged sentence

(in millions)

3 Three Months Ended October 31, Nine Months Ended October 31,

2023 2022 2023 2022

1 Three Months Ended April 30,

Operating activities:

27 unchanged sentences

Repayments of debt 0 ( 1,001 )

Payments of dividends ( 388 ) 0

Net cash used in financing activities ( 2,108 ) ( 2,716 )

Effect of exchange rate changes ( 2 ) 17

Net increase (decrease) in cash and cash equivalents ( 319 ) ( 855 ) ( 563 ) 612

Net increase in cash and cash equivalents 1,486 2,139

Cash and cash equivalents, beginning of period 8,472 7,016

2 unchanged sentences

See accompanying Notes.

T a b l e o f C o n t e n t s

Salesforce, Inc.

2 unchanged sentences

(in millions)

Three Months Ended October 31, Nine Months Ended October 31,

2023 2022 2023 2022

Three Months Ended April 30,

Supplemental cash flow disclosure:

3 unchanged sentences

See accompanying Notes.

T a b l e o f C o n t e n t s

Salesforce, Inc.

5 unchanged sentences

With the Customer 360 platform, the Company delivers a single source of truth, connecting customer data with integrated artificial intelligence across systems, apps and devices to help companies sell, service, market and conduct commerce from anywhere.

Since its founding in 1999, Salesforce has pioneered innovations in cloud, mobile, social, analytics and artificial intelligence, enabling companies of every size and industry to transform their businesses in the all-digital, work-from-anywhere era.

Since its founding in 1999, the Company has pioneered innovations in cloud, mobile, social, analytics and artificial intelligence, enabling companies of every size and industry to transform their businesses in the all-digital, work-from-anywhere era.

The Company’s fiscal year ends on January 31.

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Basis of Presentation

The accompanying condensed consolidated balance sheet as of October 31, 2023 and the condensed consolidated statements of operations, condensed consolidated statements of comprehensive income (loss), condensed consolidated statements of stockholders' equity and condensed consolidated statements of cash flows for the three and nine months ended October 31, 2023 and 2022, respectively, are unaudited.

The accompanying condensed consolidated balance sheet as of April 30, 2024 and the condensed consolidated statements of operations, comprehensive income, statements of stockholders' equity and statements of cash flows for the three months ended April 30, 2024 and 2023, respectively, are unaudited.

These financial statements have been prepared in accordance with U.S.

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GAAP for complete financial statements.

In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet as of October 31, 2023, and its results of operations, including its comprehensive income (loss), stockholders' equity and its cash flows for the three and nine months ended October 31, 2023 and 2022.

In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet as of April 30, 2024 and its results of operations, including its comprehensive income, stockholders' equity and cash flows for the three months ended April 30, 2024 and 2023.

All adjustments are of a normal recurring nature.

The results for the three and nine months ended October 31, 2023 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending January 31, 2024.

The results for the three months ended April 30, 2024 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending January 31, 2025.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2024, filed with the Securities and Exchange Commission (the “SEC”) on March 6, 2024.

3 unchanged sentences

Significant estimates and assumptions made by management include the determination of:

• the fair value of assets acquired and liabilities assumed for business combinations;

• the standalone selling price (“SSP”) of performance obligations for revenue contracts with multiple performance obligations;

• the valuation of privately-held strategic investments;

• the fair value of assets acquired and liabilities assumed for business combinations;

• the recognition, measurement and valuation of current and deferred income taxes and uncertain tax positions;

• the average period of benefit associated with costs capitalized to obtain revenue contracts;

• the useful lives of intangible assets;

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All significant intercompany balances and transactions have been eliminated in consolidation.

T a b l e o f C o n t e n t s

The Company operates as one operating segment.

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Receivables are written off and charged against the recorded allowance when the Company has exhausted collection efforts without success.

As of October 31, 2023, one customer accounted for approximately six percent of accounts receivable, and no other customers accounted for more than five percent of accounts receivable.

No single customer accounted for more than five percent of accounts receivable as of January 31, 2023.

No single customer accounted for five percent or more of total revenue during the three and nine months ended October 31, 2023 and 2022.

As of October 31, 2023 and January 31, 2023, assets located outside the Americas were 14 percent and 15 percent of total assets, respectively.

As of October 31, 2023 and January 31, 2023, assets located in the United States were 84 percent and 83 percent of total assets, respectively.

No single customer accounted for ten percent or more of accounts receivable as of April 30, 2024 and January 31, 2024.

No single customer accounted for ten percent or more of total revenue during the three months ended April 30, 2024 and 2023.

As of April 30, 2024 and January 31, 2024, assets located outside the Americas were 14 percent and 16 percent of total assets, respectively.

As of April 30, 2024 and January 31, 2024, assets located in the United States were 84 percent and 82 percent of total assets, respectively.

The Company is also exposed to concentrations of risk in its strategic investment portfolio, including within specific industries, as the Company primarily invests in enterprise cloud companies, technology st artups and system integrators.

As of October 31, 2023, the Company held two investments, both privately held, with carrying values that were individually greater than five percent of its total strategic investments portfolio and represented 16 percent of the portfolio in aggregate.

As of January 31, 2023, the Company held two investments, both privately held, with carrying values that were individuall y greater than five percent of its strategic investment portfolio and represented 16 percent of the portfolio in aggregate.

As of April 30, 2024, the Company held two investments, both privately held, with carrying values that were individually greater than five percent of its total strategic investments portfolio and represented approximately 15 percent of the portfolio in the aggregate.

As of January 31, 2024 , the Company held two investments, both privately held, with carrying values that were individually greater than five percent of its strategic investments portfolio and represented approximately 16 percent of the portfolio in the aggregate.

Revenue Recognition

1 unchanged sentence

(1) subscription and support revenues and (2) professional services and other revenues.

Subscription and support revenues include subscription fees from customers accessing the Company’s enterprise cloud computing services (collectively, “Cloud Services”), software license revenues from the sales of term and perpetual licenses and support revenues from the sales of support and updates beyond the basic subscription or software license sales.

Subscription and support revenues include subscription fees from customers accessing the Company’s enterprise cloud computing services (collectively, “Cloud Services”), software license revenues from the sales of term software licenses and support revenues from the sales of support and updates beyond the basic subscription or software license sales.

Professional services and other revenues include professional and advisory services for process mapping, project management and implementation services and training services.

7 unchanged sentences

• recognition of revenue when or as the Company satisfies the performance obligations.

T a b l e o f C o n t e n t s

Subscription and Support Revenues

2 unchanged sentences

Revenue is generally recognized ratably over the contract term.

Substantially all of the Company’s subscription service arrangements are non-cancelable and do not contain refund-type provisions.

Subscription and support revenues also include revenues associated with term and perpetual software licenses that provide the customer with a right to use the software as it exists when made available.

Revenues from term and perpetual software licenses are generally recognized at the point in time when the software is made available to the customer.

Substantially all of the Company’s subscription service arrangements are noncancellable and do not contain refund-type provisions.

Subscription and support revenues also include revenues associated with term software licenses that provide the customer with a right to use the software as it exists when made available.

Revenues from term software licenses are generally recognized at the point in time when the software is made available to the customer.

Revenue from software support and updates is recognized as the support and updates are provided, which is generally ratably over the contract term.

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Significant pricing practices taken into consideration include the Company’s discounting practices, the size and volume of the Company’s transactions, the customer demographic, the geographic area where services are sold, price lists, the Company's go-to-market strategy, historical and current sales and contract prices.

In instances where the Company does not sell or price a product or service separately, the Company determines SSP using information that may include market conditions or other observable inputs.

In instances where the Company does not sell or price a product or service separately, the Company maximizes the use of observable inputs by using information that may include market conditions.

As the Company’s go-to-market strategies evolve, the Company may modify its pricing practices in the future, which could result in changes to SSP.

4 unchanged sentences

Costs Capitalized to Obtain Revenue Contracts

The Company capitalizes incremental costs of obtaining revenue contracts related to non-cancelable Cloud Services subscription, ongoing Cloud Services support and license support and updates.

For contracts with on-premises software licenses where revenue is recognized upfront when the software is made available to the customer, costs allocable to those licenses are expensed as they are incurred.

Capitalized amounts consist primarily of sales commissions paid to the Company’s direct sales

T a b l e o f C o n t e n t s

Capitalized amounts also include (1) amounts paid to employees other than the direct sales force who earn incentive payouts under annual compensation plans that are tied to the value of contracts acquired, (2) commissions paid to employees upon renewals of subscription and support contracts, (3) the associated payroll taxes and fringe benefit costs associated with the payments to the Company’s employees and (4) to a lesser extent, success fees paid to partners in emerging markets where the Company has a limited presence.

The Company capitalizes incremental costs of obtaining revenue contracts related to noncancellable Cloud Services subscription, ongoing Cloud Services support and license support and updates.

For contracts with term software licenses where revenue is recognized upfront when the software is made available to the customer, costs allocable to those licenses are expensed as they are incurred.

Capitalized amounts consist primarily of sales commissions paid to the Company’s direct sales force.

Capitalized amounts also include (1) amounts paid to employees other than the direct sales force who earn incentive

payouts under annual compensation plans that are tied to the value of contracts acquired, (2) commissions paid to employees upon renewals of subscription and support contracts, (3) the associated payroll taxes and fringe benefit costs associated with the payments to the Company’s employees and (4) to a lesser extent, success fees paid to partners in emerging markets where the Company has a limited presence.

Costs capitalized related to new revenue contracts are amortized on a straight-line basis over four years , which is longer than the typical initial contract period, but reflects the estimated average period of benefit, including expected contract renewals.

1 unchanged sentence

Additionally, the Company amortizes capitalized costs for renewals and success fees paid to partners over two years .

The capitalized amounts are recoverable through future revenue streams under all non-cancelable customer contracts.

The capitalized amounts are recoverable through future revenue streams under all noncancellable customer contracts.

The Company periodically evaluates whether there have been any changes in its business, the market conditions in which it operates or other events which would indicate that its amortization period should be changed or if there are potential indicators of impairment.

Amortization of capitalized costs to obtain revenue contracts is included in marketing and sales expense in the accompanying condensed consolidated statements of operations.

There were no impairments of costs to obtain revenue contracts for the three and nine months ended October 31, 2023 and 2022.

Amortization of capitalized costs to obtain revenue contracts is included in sales and marketing expense in the accompanying condensed consolidated statements of operations.

There were no impairments of costs to obtain revenue contracts for the three months ended April 30, 2024 and 2023.

Cash and Cash Equivalents

3 unchanged sentences

The Company considers all of its marketable debt securities as available for use in current operations, including those with maturity dates beyond one year, and therefore classifies these securities within current assets on the condensed consolidated balance sheets.

Securities are classified as available for sale and are carried at fair value, with the change in unrealized gains and losses, net of tax, reported as a separate component on the condensed consolidated statements of comprehensive income (loss) until realized.

Fair value is determined based on quoted market rates when observable or utilizing data points that are observable, such as quoted prices, interest rates and yield curves.

Securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of the excess, if any, is caused by expected credit losses.

Expected credit losses on securities are recognized in other income (expense) on the condensed consolidated statements of operations, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss) in stockholders' equity.

Expected credit losses on securities are recognized in other income (expense) on the condensed consolidated statements of operations and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income in stockholders' equity.

For the purposes of computing realized and unrealized gains and losses, the cost of securities sold is based on the specific-identification method.

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Privately held debt securities are recorded at fair value with changes in fair value recorded through accumulated other comprehensive loss on the condensed consolidated balance sheet.

Other privately held investments not classified as debt or equity securities are recorded at cost and adjusted for impairment events, with any associated gains and losses recorded through gains (losses) on strategic investments, net on the consolidated statements of operations.

Valuations of privately held securities are inherently complex and require judgment due to the lack of readily available market data.

In determining the estimated fair value of its strategic investments in privately held companies, the Company utilizes the most recent data available to the Company.

The Company assesses its privately held debt and equity securities in its strategic investment portfolio at least quarterly for impairment.

The Company assesses its privately held strategic investments quarterly for impairment.

The Company’s impairment analysis encompasses an assessment of both qualitative and quantitative factors, including the investee's financial metrics, market acceptance of the investee's product or technology and the rate at which the investee is using its cash.

1 unchanged sentence

Publicly held equity securities are measured at fair value with changes recorded through gains (losses) on strategic investments, net on the condensed consolidated statements of operations.

T a b l e o f C o n t e n t s

The Company may enter into strategic investments or other investments that are considered variable interest entities (“VIEs”).

3 unchanged sentences

VIEs that are not consolidated are accounted for under the measurement alternative, equity method, amortized cost, or other appropriate methodology based on the nature of the interest held.

The Company did not consolidate any VIEs as of April 30, 2024 and April 30, 2023.

Fair Value Measurement

The Company measures its cash and cash equivalents, marketable securities, publicly held equity securities and foreign currency derivative contracts at fair value.

In addition, the Company measures certain of its strategic investments, including its privately held debt securities and privately held equity securities, at fair value on a nonrecurring basis when there has been an observable price change in a same or similar security or an impairment.

In addition, the Company measures certain of its strategic investments, including its privately held debt and equity securities, at fair value on a nonrecurring basis when there has been an observable price change in a same or similar security or an impairment event.

The additional disclosures regarding the Company’s fair value measurements are included in Note 4 “Fair Value Measurement.”

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While the contract or notional amount is often used to express the volume of foreign currency derivative contracts, the amounts potentially subject to credit risk are generally limited to the amounts, if any, by which the counterparties’ obligations under the agreements exceed the obligations of the Company to the counterparties.

The notional amount of foreign currency derivative contracts as of October 31, 2023 and January 31, 2023 was $ 7.3 billion and $ 6.0 billion, respectively.

The notional amount of outstanding foreign currency derivative contracts as of April 30, 2024 and January 31, 2024 was $ 9.1 billion and $ 8.6 billion, respectively.

Outstanding foreign currency derivative contracts are recorded at fair value on the condensed consolidated balance sheets.

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The Company does not recognize ROU assets or lease liabilities for leases with a term of 12 months or less for any asset classes.

T a b l e o f C o n t e n t s

Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement, net of any future tenant incentives.

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In the event the Company acquires an entity with which the Company has a preexisting relationship, the Company will generally recognize a gain or loss to settle that relationship as of the acquisition date within operating income on the condensed

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consolidated statements of operations.

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Stock-Based Compensation Expense

Stock-based compensation expense is measured based on grant date at fair value using the Black-Scholes option pricing model for stock options and the grant date closing stock price for restricted stock awards.

The Company recognizes stock-based compensation expense related to stock options and restricted stock awards on a straight-line basis, net of estimated forfeitures, over the requisite service period of the awards, which is generally the vesting term of four years .

Stock-based compensation expense is measured based on grant date at fair value using the grant date closing stock price for restricted stock units and restricted stock awards and using the Black-Scholes option pricing model for stock options.

The Company recognizes stock-based compensation expense related to restricted stock units, restricted stock awards, and stock options and restricted stock awards on a straight-line basis, net of estimated forfeitures, over the requisite service period of the awards, which is generally the vesting term of four years .

The estimated forfeiture rate applied is based on historical forfeiture rates.

The Company grants performance share awards to executive officers and other members of senior management, which may include a market condition, a performance condition, or both.

Stock-based compensation expense related to awards with a market condition are measured at fair value using a Monte Carlo simulation model and the expense related to these awards is recognized on a graded-vesting basis, net of estimated forfeitures, over the requisite service period of the awards, which is generally the vesting term.

Stock-based compensation expense related to awards with a performance condition are measured based on the grant date closing stock price and the expense related to these awards is recognized based on the requisite service period elapsed, as well as the probability of achievement and estimated attainment of the performance condition as of the end of our reporting period.

Stock-based compensation expense related to the Company’s Amended and Restated 2004 Employee Stock Purchase Plan (“ESPP” or “2004 Employee Stock Purchase Plan”) is measured based on grant date at fair value using the Black-Scholes option pricing model.

The Company recognizes stock-based compensation expense related to shares issued pursuant to the 2004 Employee Stock Purchase Plan on a straight-line basis over the offering period, which is 12 months.

The ESPP allows employees to purchase shares of the Company's common stock at a 15 percent discount from the lower of the Company’s stock price on (i) the first day of the offering period or on (ii) the last day of the purchase period and also allows employees to reduce their percentage election once during a six-month purchase period (December 15 and June 15 of each fiscal year), but not to increase that election until the next one-year offering period.

The ESPP also includes a reset provision for the purchase price if the stock price on the purchase date is less than the stock price on the offering date.

The Company, at times, grants performance share awards to executive officers and other members of senior management, which may include a market condition or performance condition, or both.

Stock-based compensation expense related to awards with a market condition are measured at fair value using a Monte Carlo simulation model and stock-based compensation expense related to these awards is recognized on a straight-line basis, net of estimated forfeitures, over the requisite service period of the awards, which is generally the vesting term.

Stock-based compensation expense related to awards with a performance condition are measured based on the grant date closing stock price and stock-based compensation expense related to these awards is recognized based on the requisite service period elapsed, as well as the probability of achievement and estimated attainment of the performance condition as of the end of our reporting period.

The ESPP also allows employees to reduce their percentage election once during a six-month purchase period (December 15 and June 15 of each fiscal year), but not to increase that election until the next one-year offering period.

The ESPP includes a reset provision for the purchase price if the stock price on the purchase date is less than the stock price on the offering date.

The Company, at times, grants unvested restricted shares to employee stockholders of certain acquired companies in lieu of cash consideration.

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Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character (for example, ordinary income or capital gain) within the carryback or carryforward periods available under the applicable tax law.

The Company regularly reviews the deferred tax assets for recoverability based on historical taxable income, projected future taxable income,

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the expected timing of the reversals of existing temporary differences and tax planning strategies.

regularly reviews the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies.

The Company’s judgments regarding future profitability may change due to many factors, including future market conditions and the ability to successfully execute its business plans.

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Adjustments resulting from translating foreign functional currency financial statements into U.S.

dollars are recorded as a separate component on the condensed consolidated statements of comprehensive income (loss).

dollars are recorded as a separate component on the condensed consolidated statements of comprehensive income.

Foreign currency transaction gains and losses are included in other income (expense) in the condensed consolidated statements of operations for the period.

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The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.

New Accounting Pronouncement Pending Adoption

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires additional operating segment disclosures in annual and interim consolidated financial statements.

ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and for interim periods beginning after December 15, 2024 on a retrospective basis, with early adoption permitted.

The Company is evaluating the effect that ASU 2023-07 will have on its financial statement disclosures.

In December 2023, the FASB issued Accounting Standards Update No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a retrospective or prospective basis.

The Company is evaluating the effect that ASU 2023-09 will have on its financial statement disclosures.

Disaggregation of Revenue

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Subscription and support revenues consisted of the following (in millions):

Three Months Ended October 31, Nine Months Ended October 31,

2023 2022 2023 2022

Three Months Ended April 30,

Sales $ 1,998 $ 1,810

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Marketing and Commerce 1,282 1,170

Data (1) 1,245 1,018 3,562 2,994

Integration and Analytics (1) 1,405 1,131

$ 8,585 $ 7,642

(1) Data is comprised of revenue from Analytics, which includes Tableau, and Integration, which includes Mulesoft.

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(1) In the fourth quarter of fiscal 2024, the Company renamed the service offering previously referred to as Data to Integration and Analytics, which includes Mulesoft and Tableau.

Total Revenue by Geographic Locations

Revenues by geographical region consisted of the following (in millions):

Three Months Ended October 31, Nine Months Ended October 31,

2023 2022 2023 2022

Three Months Ended April 30,

Americas $ 6,062 $ 5,482

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Revenues by geography are determined based on the region of the Company's contracting entity, which may be different than the region of the customer.

Americas revenue attributed to the United States was approximately 93 percent and 92 percent during the three months ended October 31, 2023 and 2022, respectively.

Americas’ revenue attributed to the United States was approximately 93 percent during the nine months ended October 31, 2023 and 2022.

No other country represented more than ten percent of total revenue during the three and nine months ended October 31, 2023 and 2022.

Americas revenue attributed to the United States was approximately 93 percent during the three months ended April 30, 2024 and 2023.

No other country represented more than ten percent of total revenue during the three months ended April 30, 2024 and 2023.

Contract Balances

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The Company records a contract asset when revenue recognized on a contract exceeds the billings.

Contract assets were $ 866 million as of October 31, 2023 as compared to $ 648 million as of January 31, 2023, and are included in prepaid expenses and other current assets and deferred tax assets and other assets, net on the condensed consolidated balance sheets.

Contract assets were $ 828 million as of April 30, 2024 as compared to $ 758 million as of January 31, 2024, and are included in prepaid expenses and other current assets and deferred tax assets and other assets, net on the condensed consolidated balance sheets.

Unearned Revenue

Unearned revenue represents amounts that have been invoiced in advance of revenue recognition and is recognized as revenue when transfer of control to customers has occurred or services have been provided.

The unearned revenue balance does not represent the total contract value of annual or multi-year, non-cancelable subscription agreements.

The unearned revenue balance does not represent the total contract value of annual or multi-year, noncancellable subscription agreements.

The unearned revenue balance is influenced by several factors, including seasonality, the compounding effects of renewals, invoice duration, invoice timing, dollar size and new business linearity within the quarter.

The change in unearned revenue was as follows (in millions):

Three Months Ended October 31, Nine Months Ended October 31,

2023 2022 2023 2022

Three Months Ended April 30,

Unearned revenue, beginning of period $ 19,003 $ 17,376

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(1) Other includes, for example, the impact of foreign currency translation.

The majority of revenue recognized for these services in the period was included in the unearned revenue balance as of the beginning of the period.

The majority of revenue recognized for these services is from the beginning of period unearned revenue balance.

Revenue recognized over time primarily includes Cloud Services subscription and support revenue, which is generally recognized ratably over time, and professional services and other revenue, which is generally recognized ratably or as delivered.

Revenue recognized at a point in time substantially consists of on-premises software licenses.

Revenue recognized at a point in time substantially consists of term software licenses.

Remaining Performance Obligation

Remaining performance obligation represents contracted revenue that has not yet been recognized and includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods.

Transaction price allocated to the remaining performance obligation is based on SSP.

Remaining performance obligation is influenced by several factors, including seasonality, the timing of renewals, the timing of software license deliveries, average contract terms and foreign currency exchange rates.

The transaction price allocated to the remaining performance obligation is based on SSP.

Remaining performance obligation is influenced by several factors, including seasonality, the timing of renewals, the timing of term license deliveries, average contract terms and foreign currency exchange rates.

Remaining performance obligation is also impacted by acquisitions.

Unbilled portions of the remaining performance obligation denominated in foreign currencies are revalued each period based on the period end exchange rates.

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Remaining performance obligation is subject to future economic risks, including bankruptcies, regulatory changes and other market factors.

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Current Noncurrent Total

As of October 31, 2023 $ 23.9 $ 24.4 $ 48.3

As of April 30, 2024 $ 26.4 $ 27.5 $ 53.9

As of January 31, 2024 $ 27.6 $ 29.3 $ 56.9

Marketable Securities

At October 31, 2023, marketable securities consisted of the following (in millions):

At April 30, 2024, marketable securities consisted of the following (in millions):

Cost Unrealized

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The contractual maturities of the investments classified as marketable securities were as follows (in millions):

October 31, 2023 January 31, 2023

April 30, 2024 January 31, 2024

Due within 1 year $ 4,092 $ 2,523

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$ 7,712 $ 5,722

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Strategic Investments

Strategic investments by form and measurement category as of October 31, 2023 were as follows (in millions):

Strategic investments by form and measurement category as of April 30, 2024 were as follows (in millions):

Measurement Category

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Debt securities and other investments 0 0 133 133

Balance as of October 31, 2023

Balance as of April 30, 2024

$ 83 $ 4,629 $ 266 $ 4,978

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The Company holds investments in, or management agreements with, VIEs which the Company does not consolidate because it is not considered the primary beneficiary of these entities.

The carrying value of VIEs within strategic investments was $ 419 million and $ 354 million, as of October 31, 2023 and January 31, 2023, respectively.

The carrying value of VIEs within strategic investments was $ 436 million and $ 382 million, as of April 30, 2024 and January 31, 2024, respectively.

Gains (Losses) on Strategic Investments, Net

The components of gains and losses on strategic investments were as follows (in millions):

3 Three Months Ended October 31, Nine Months Ended October 31,

2023 2022 2023 2022

Unrealized losses recognized on publicly traded equity securities, net $ ( 2 ) $ 0 $ 0 $ ( 103 )

1 Three Months Ended April 30,

Unrealized gains recognized on publicly traded equity securities, net $ 3 $ 0

Unrealized gains recognized on privately held equity securities, net 105 38

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Unrealized losses, net ( 22 ) ( 139 )

Realized gains on sales of securities, net 14 34 48 125

Realized gains (losses) on sales of securities, net 59 ( 2 )

Gains (losses) on strategic investments, net $ 37 $ ( 141 )

Unrealized gains and losses recognized on privately held equity securities, net includes upward and downward adjustments from equity securities accounted for under the measurement alternative, as well as gains and losses from private equity securities in other measurement categories.

For privately held securities accounted for under the measurement alternative, the Company recorded upward adjustments of $ 14 million and $ 66 million and impairments and downward adjustments of $ 98 million and $ 66 million for the three months ended October 31, 2023 and 2022, respectively, and upward adjustments of $ 65 million and $ 196 million and impairments of $ 354 million and $ 96 million for the nine months ended October 31, 2023 and 2022, respectively.

For privately held securities accounted for under the measurement alternative, the Company recorded upward adjustments of $ 116 million and $ 46 million and impairments and downward adjustments of $ 139 million and $ 175 million for the three months ended April 30, 2024 and 2023 , respectively .

Realized gains on sales of securities, net reflects the difference between the sale proceeds and the carrying value of the security at the beginning of the period or the purchase date, if later.

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Significant unobservable inputs which are supported by little or no market activity.

All of the Company’s cash equivalents, marketable securities and foreign currency derivative contracts are classified within Level 1 or Level 2 because the Company’s cash equivalents, marketable securities and foreign currency derivative contracts are valued using quoted market prices or alternative pricing sources and models utilizing observable market inputs.

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The following table presents information about the Company’s assets and liabilities that were measured at fair value as of October 31, 2023 and indicates the fair value hierarchy of the valuation (in millions):

All of the Company’s cash equivalents, marketable securities and foreign currency derivative contracts are classified within Level 1 or Level 2 because these assets are valued using quoted market prices or alternative pricing sources and models utilizing observable market inputs.

The following table presents information about the Company’s assets that were measured at fair value as of April 30, 2024 and indicates the fair value hierarchy of the valuation (in millions):

Description Quoted Prices in

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Total assets $ 5,735 $ 10,243 $ 0 $ 15,978

(1) Included in “cash and cash equivalents” in the accompanying condensed consolidated balance sheets in addition to $ 1.7 billion of cash, as of October 31, 2023.

The following table presents information about the Company’s assets and liabilities that were measured at fair value as of January 31, 2023 and indicates the fair value hierarchy of the valuation (in millions):

(1) Included in “cash and cash equivalents” in the accompanying condensed consolidated balance sheets in addition to $ 1.8 billion of cash, as of April 30, 2024.

The following table presents information about the Company’s assets that were measured at fair value as of January 31, 2024 and indicates the fair value hierarchy of the valuation (in millions):

Description Quoted Prices in

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(1) Included in “cash and cash equivalents” in the accompanying condensed consolidated balance sheets in addition to $ 2.2 billion of cash, as of January 31, 2024.

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Strategic Investments Measured and Recorded at Fair Value on a Non-Recurring Basis

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When indicators of impairment are observed for privately held equity securities, the Company generally uses the market approach to estimate the fair value of its investment, giving consideration to the latest observable transactions, as well as the investee's current and projected financial performance and other significant inputs and assumptions, including estimated time to exit, selection and analysis of guideline public companies and the rights and obligations of the securities the Company holds.

The Company's privately held debt and equity securities and other investments amounted to $ 4.7 billion and $ 4.6 billion as of October 31, 2023 and January 31, 2023, respectively.

The Company's privately held debt and equity securities and other investments amounted to $ 4.9 billion and $ 4.8 billion as of April 30, 2024 and January 31, 2024, respectively.

Leases and Other Commitments

The Company has leases for corporate offices, data centers and equipment under non-cancelable operating and finance leases with various expiration dates.

Total operating lease costs were $ 163 million and $ 239 million for the three months ended October 31, 2023 and 2022, respectively, and were $ 823 million and $ 692 million for the nine months ended October 31, 2023 and 2022, respectively.

The Company has leases for corporate offices, data centers and equipment under noncancellable operating and finance leases with various expiration dates.

Total operating lease costs were $ 158 million and $ 469 million for the three months ended April 30, 2024 and 2023, respectively.

Included in operating lease costs are amounts related to restructuring charges, which are discussed in Note 9 “Restructuring.”

As of October 31, 2023, the maturities of lease liabilities under non-cancelable operating and finance leases were as follows (in millions):

As of April 30, 2024, the maturities of lease liabilities under noncancellable operating and finance leases were as follows (in millions):

Operating Leases Finance Leases

Fiscal Period:

Remaining three months of fiscal 2024 $ 143 $ 96

Remaining nine months of fiscal 2025 $ 489 $ 291

Fiscal 2026 587 340

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Total $ 3,087 $ 876

As of October 31, 2023, the Company has additional operating and finance leases that have not yet commenced totaling $ 84 million, which are not reflected on the condensed consolidated balance sheets or the tables above.

These leases will commence between fiscal year 2024 and fiscal year 2025 with lease terms of 2 to 16 years.

Other Balance Sheet Accounts

Accounts payable, accrued expenses and other liabilities as of October 31, 2023 included approximately $ 1.8 billion of accrued compensation as compared to $ 2.6 billion as of January 31, 2023.

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Accounts payable, accrued expenses and other liabilities as of April 30, 2024 included approximately $ 1.5 billion of accrued compensation as compared to $ 2.5 billion as of January 31, 2024.

Business Combinations

In February 2024, the Company acquired all outstanding stock of Spiff, Inc.

(“Spiff”), an incentive compensation management platform company.

The acquisition date fair value of the consideration transferred for Spiff was $ 419 million, which consisted primarily of $ 374 million in cash.

The Company recorded $ 323 million of goodwill which is primarily attributed to the assembled workforce and expanded market opportunities.

The goodwill associated with the acquisition of Spiff has no basis and is not deductible for U.S.

income tax purposes.

The Company also recorded approximately $ 52 million of intangible assets for developed technology and customer relationships with useful lives of nine and five years , respectively.

The fair values assigned to assets acquired and liabilities assumed are based on management’s estimates and assumptions and may be subject to change as additional information is received and certain tax returns are finalized.

The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date.

The Company has included the financial results of Spiff, which were not material, in its condensed consolidated financial statements from the date of acquisition.

The transaction costs associated with the acquisition were also not material.

Intangible Assets Acquired Through Business Combinations and Goodwill

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Remaining Useful Life (Years)

January 31, 2023 Additions and retirements, net October 31, 2023 January 31, 2023 Expense and retirements, net October 31, 2023 January 31, 2023 October 31, 2023 October 31, 2023

January 31, 2024 Additions and retirements, net April 30, 2024 January 31, 2024 Expense and retirements, net April 30, 2024 January 31, 2024 April 30, 2024 April 30, 2024

Acquired developed technology $ 4,624 $ 44 $ 4,668 $ ( 3,208 ) $ ( 238 ) $ ( 3,446 ) $ 1,416 $ 1,222 2.0

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(1) Included in Other are in-place leases, trade names, trademarks and territory rights.

Amortization of intangible assets resulting from business combinations for the three months ended October 31, 2023 and 2022 was $ 468 million and $ 474 million, respectively, and for the nine months ended October 31, 2023 and 2022 was $ 1.4 billion and $ 1.5 billion, respectively.

The expected future amortization expense for intangible assets as of October 31, 2023 was as follows (in millions):

Amortization of intangible assets resulting from business combinations for the three months ended April 30, 2024 and 2023 was $ 461 million, and $ 471 million, respectively.

The expected future amortization expense for intangible assets as of April 30, 2024 was as follows (in millions):

Fiscal Period:

Remaining three months of fiscal 2024 $ 459

Remaining nine months of fiscal 2025 $ 1,153

Fiscal 2026 1,372

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Balance as of January 31, 2024 $ 48,620

Acquisitions and adjustments (1) 46

Balance as of October 31, 2023 $ 48,614

(1) Acquisitions and adjustments include the effect of foreign currency translation.

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Acquisition of Spiff 323

Adjustments (1) ( 3 )

Balance as of April 30, 2024 $ 48,940

(1) Adjustments include the effect of foreign currency translation .

The components of the Company's borrowings were as follows (in millions):

Instrument Date of Issuance Maturity Date Contractual Interest Rate Outstanding Principal as of October 31, 2023

Carrying Value as of October 31, 2023 Carrying Value as of January 31, 2023

2023 Senior Notes (1) April 2018 April 2023 3.25 % $ 0 $ 0 $ 1,000

Loan assumed on 50 Fremont (2) February 2015 June 2023 3.75 0 0 182

Instrument Date of Issuance Maturity Date Contractual Interest Rate Outstanding Principal as of April 30, 2024

Carrying Value as of April 30, 2024 Carrying Value as of January 31, 2024

2024 Senior Notes July 2021 July 2024 0.625 % 1,000 1,000 999

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Total noncurrent debt $ 8,429 $ 8,427

(1) The Company repaid in full the 2023 Senior Notes in the first quarter of fiscal 2024.

(2) The Company repaid in full the Loan assumed on 50 Fremont in the second quarter of fiscal 2024.

The Company was in compliance with all debt covenants as of October 31, 2023.

The total estimated fair value of the Company's outstanding senior unsecured notes (the “Senior Notes”) above was $ 7.1 billion and $ 8.8 billion as of October 31, 2023 and January 31, 2023 , respectively.

The fair value was determined based on the closing trading price per $ 100 of the Senior Notes as of the last day of trading of the third quarter of fiscal 2024 and the last day of trading of fiscal 2023, respectively, and are deemed Level 2 liabilities within the fair value measurement framework.

The contractual future principal payments for all borrowings as of October 31, 2023 were as follows (in millions):

The Company was in compliance with all debt covenants as of April 30, 2024.

The total estimated fair value of the Company's outstanding senior unsecured notes (the “Senior Notes”) above was $ 7.4 billion and $ 7.8 billion as of April 30, 2024 and January 31, 2024 , respectively.

The fair value was determined based on the closing trading price per $ 100 of the Senior Notes as of the last day of trading of the first quarter of fiscal 2025 and the last day of trading of fiscal 2024, respectively, and are deemed Level 2 liabilities within the fair value measurement framework.

The contractual future principal payments for all borrowings as of April 30, 2024 were as follows (in millions):

Fiscal Period:

Remaining three months of fiscal 2024 $ 0

Remaining nine months of fiscal 2025 $ 1,000

Fiscal 2026 0

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In December 2020, the Company entered into a Credit Agreement with Citibank, N.A., as administrative agent, and certain other institutional lenders (the “Revolving Loan Credit Agreement”) that provides for a $ 3.0 billion unsecured revolving credit facility (“Credit Facility”) and matures in December 2025.

The Company may use the proceeds of future borrowings under the Credit Facility for general corporate purposes, which may include, without limitation, financing the consideration for, fees, costs and expenses related to any acquisition.

The Company may use the proceeds of future borrowings under the Credit Facility for general corporate purposes, which may include, without limitation, the consideration, fees, costs and expenses related to any acquisition.

The Company amended the Revolving Loan Credit Agreement in April 2022 and May 2023, in each case to reflect certain administrative changes.

There were no outstanding borrowings under the Credit Facility as of October 31, 2023.

There were no outstanding borrowings under the Credit Facility as of April 30, 2024.

Restructuring

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This plan included a reduction of the Company’s workforce and select real estate exits and office space reductions within certain markets.

The actions associated with the employee restructuring under the Restructuring Plan are expected to be substantially complete by the end of the Company’s fiscal 2024, subject to local law and consultation requirements.

The actions associated with the real estate restructuring under the Restructuring Plan are expected to be fully complete in fiscal 2026.

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The following table summarizes the activities related to the Restructuring Plan for the three and nine months ended October 31, 2023 (in millions):

Three Months Ended October 31, 2023 Nine Months Ended October 31, 2023

Workforce Reduction Office Space Reductions Total Workforce Reduction Office Space Reductions Total

The actions associated with the employee restructuring under the Restructuring Plan were substantially completed in fiscal 2024 and the actions associated with the real estate portion of the Restructuring Plan are expected to be substantially complete in fiscal 2026.

In the first quarter of fiscal 2025, the Company approved an initiative focused on driving further operational efficiencies, optimizing our management structure and increasing cost optimization efforts to realize long-term sustainable growth through a targeted workforce reduction.

The actions associated with this initiative are expected to be substantially complete in fiscal 2025.

The following tables summarize the activities related to the Company’s restructuring initiatives for the three months ended April 30, 2024 and 2023 (in millions):

Three Months Ended April 30, 2024

Workforce Reduction Office Space Reductions Total

Liability, beginning of the period $ 118 $ 2 $ 120

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Liability, end of the period $ 57 $ 0 $ 57

As of October 31, 2023, the liability for restructuring charges, which is related to workforce and office space reductions, is included in accounts payable, accrued expenses and other liabilities on the condensed consolidated balance sheet.

The charges reflected in the table above related to workforce reduction included charges for employee transition, severance payments, employee benefits and share-based compensation.

The charges reflected in the table above related to office space reductions included exit charges associated with those reductions.

Three Months Ended April 30, 2023

Workforce Reduction Office Space Reductions Total

Liability, beginning of the period $ 607 $ 0 $ 607

Charges 344 367 711

Payments ( 320 ) 0 ( 320 )

Non-cash items ( 17 ) ( 367 ) ( 384 )

Liability, end of the period $ 614 $ 0 $ 614

The liability for restructuring charges, which is related to workforce and office space reductions, is included in accounts payable, accrued expenses and other liabilities on the condensed consolidated balance sheets.

The charges reflected in the tables above related to workforce reduction included charges for employee transition, severance payments, employee benefits and share-based compensation.

The charges reflected in the tables above related to office space reductions included exit charges associated with those reductions.

Stockholders’ Equity

Stock option activity for the nine months ended October 31, 2023 was as follows:

Stock option activity for the three months ended April 30, 2024 was as follows:

Options Outstanding

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Exercised ( 1 ) 174.62

Plan shares expired or canceled ( 2 ) 204.09

Balance as of October 31, 2023 16 $ 183.84 $ 480

Balance as of April 30, 2024 11 $ 190.70 $ 1,222

Vested or expected to vest 11 $ 190.10 $ 1,192

Exercisable as of October 31, 2023 11 $ 172.98 $ 407

Restricted stock activity for the nine months ended October 31, 2023 was as follows:

Exercisable as of April 30, 2024 7 $ 175.19 $ 874

Restricted stock activity for the three months ended April 30, 2024 was as follows:

Restricted Stock Outstanding

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Vested and converted to shares ( 5 ) 197.41

Balance as of October 31, 2023 28 $ 199.88 $ 5,807

Balance as of April 30, 2024 33 $ 239.08 $ 8,801

Expected to vest 27 $ 7,367

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The aggregate expected stock-based compensation expense remaining to be recognized as of October 31, 2023 was as follows (in millions):

The aggregate expected stock-based compensation expense remaining to be recognized as of April 30, 2024 was as follows (in millions):

Fiscal Period:

Remaining three months of fiscal 2024 $ 697

Remaining nine months of fiscal 2025 $ 2,483

Fiscal 2026 2,505

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Total stock-based compensation expense $ 7,766

The aggregate expected stock-based compensation expense remaining to be recognized reflects only outstanding stock awards as of October 31, 2023 and assumes no forfeiture activity and no changes in the expected level of attainment of performance share grants based on the Company’s financial performance relative to certain targets.

The aggregate expected stock-based compensation expense remaining to be recognized reflects only outstanding stock awards as of April 30, 2024 and assumes no forfeiture activity and no changes in the expected level of attainment of performance share grants based on the Company’s financial performance relative to certain targets.

Share Repurchase Program

In August 2022, the Board of Directors authorized a program to repurchase up to $ 10.0 billion of the Company’s common stock (the “Share Repurchase Program”).

In February 2023, the Board of Directors authorized an additional $ 10.0 billion in repurchases under the Share Repurchase Program.

In February 2024, the Board of Directors authorized an additional $ 10.0 billion in repurchases under the Share Repurchase Program for an aggregate total authorization of $ 30.0 billion.

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The Company accounts for treasury stock under the cost method.

During the three and nine months ended October 31, 2023, the Company repurchased approximately 9 million and 29 million shares of its common stock for approximately $ 1.9 billion and $ 6.0 billion, at an average price per share of $ 209.33 and $ 201.95 , respectively.

During the three and nine months ended October 31, 2022, the Company repurchased approximately 11 million shares of its common stock for approximately $ 1.7 billion at an average price per share of $ 152.66 .

The Company repurchased the following under its Share Repurchase Program (in millions, except average price per share):

Shares Average price per share Amount Shares Average price per share Amount

Three months ended April 30 7 $ 293.00 $ 2,168 11 $ 188.17 $ 2,143

All repurchases were made in open market transactions.

As of October 31, 2023, the Company was authorized to purchase a remaining $ 10.0 billion of its common stock under the Share Repurchase Program.

As of April 30, 2024, the Company was authorized to purchase a remaining $ 16.2 billion of its common stock under the Share Repurchase Program.

In February 2024, the Company announced a cash dividend of $ 0.40 per share of the Company’s outstanding common stock to stockholders of record as of the close of business on March 14, 2024, which was paid on April 11, 2024 in the amount of approximately $ 388 million.

Effective Tax Rate

The Company computes its year-to-date provision for income taxes by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusts the provision for discrete tax items recorded in the period.

For the nine months ended October 31, 2023, the Company reported a tax provision of $ 615 million on pretax income of $ 3.3 billion, which resulted in an effective tax rate of 19 percent.

For the three months ended April 30, 2024, the Company reported a tax provision of $ 334 million on pretax income of $ 1.9 billion, which resulted in an effective tax rate of 18 percent.

The Company’s effective tax rate differed from the U.S.

statutory rate of 21 percent primarily due to discrete benefits from research and development credits, foreign tax credits attributable to the IRS Notice 2023-55, and certain adjustments resulted from a transfer pricing agreement in a foreign tax jurisdiction, partially offset by profitable jurisdictions outside of the United States subject to tax rates greater than 21 percent and withholding taxes.

For the nine months ended October 31, 2022, the Company reported a tax provision of $ 321 million on pretax income of $ 627 million, which resulted in an effective tax rate of 51 percent.

statutory rate of 21 percent primarily due to research and development credits and excess tax benefits from stock-based compensation.

For the three months ended April 30, 2023, the Company reported a tax provision of $ 127 million on pretax income of $ 326 million, which resulted in an effective tax rate of 39 percent.

The Company’s effective tax rate differed from the U.S.

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Tax positions for the Company and its subsidiaries are subject to income tax audits by multiple tax jurisdictions throughout the world.

Certain prior year tax returns are currently being examined by various taxing authorities in countries including the United States, Germany, and Israel.

Certain prior year tax returns are currently being examined by various taxing authorities in countries including the United States, Germany, France, Israel, and India.

The Company believes that it has provided adequate reserves for its income tax uncertainties in all open tax years.

As the outcome of the tax audits cannot be predicted with certainty, if any issues arising in the Company’s tax audits progress in a manner inconsistent with management's expectations, the Company could adjust its provision for income taxes in the future.

In addition, the Company anticipates it is reasonably possible that an insignificant decrease of its unrecognized tax benefits may occur in the

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next 12 months, as the applicable statutes of limitations lapse, ongoing examinations are completed, or tax positions meet the conditions of being effectively settled.

In addition, the Company anticipates it is reasonably possible that an insignificant decrease of its unrecognized tax benefits may occur in the next 12 months, as the applicable statutes of limitations lapse, ongoing examinations are completed, or tax positions meet the conditions of being effectively settled.

Net Income Per Share

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A reconciliation of the denominator used in the calculation of basic and diluted earnings per share is as follows (in millions):

3 Three Months Ended October 31, Nine Months Ended October 31,

2023 2022 2023 2022

1 Three Months Ended April 30,

Net income $ 1,533 $ 199

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Employee stock awards 15 8

Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share 981 1,000 985 1,001

Weighted-average shares outstanding for diluted earnings per share 985 988

The weighted-average number of shares outstanding used in the computation of diluted earnings per share does not include the effect of the following potentially outstanding common stock.

The effects of these potentially outstanding shares were not included in the calculation of diluted earnings per share because the effect would have been anti-dilutive (in millions):

Three Months Ended October 31, Nine Months Ended October 31,

2023 2022 2023 2022

Three Months Ended April 30,

Employee stock awards 5 23

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In management’s opinion, resolution of all current matters, including those described below, is not expected to have a material adverse impact on the Company’s financial statements.

However, depending on the nature and timing of any such dispute, payment or other contingency, the resolution of a matter could materially affect the Company’s current or future results of operations or cash flows, or both, in a particular quarter.

However, depending on the nature and timing of any such

dispute, payment or other contingency, the resolution of a matter could materially affect the Company’s current or future results of operations or cash flows, or both, in a particular quarter.

Slack Litigation

Beginning in September 2019, seven purported class action lawsuits were filed against Slack, its directors, certain of its officers and certain investment funds associated with certain of its directors, each alleging violations of securities laws in connection with Slack’s registration statement on Form S-1 (the “Registration Statement”) filed with the SEC.

All but one of these actions were filed in the Superior Court of California for the County of San Mateo, though one plaintiff originally filed in

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the County of San Francisco before refiling in the County of San Mateo (and the original San Francisco action was dismissed).

All but one of these actions were filed in the Superior Court of California for the County of San Mateo, though one plaintiff originally filed in the County of San Francisco before refiling in the County of San Mateo (and the original San Francisco action was dismissed).

The remaining action was filed in the U.S.

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The Federal Action and the State Court Action seek unspecified monetary damages and other relief on behalf of investors who purchased Slack’s Class A common stock issued pursuant and/or traceable to the Registration Statement.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements